Zurich Insurance Group posted a fall in profits in the first quarter, with lower net releases of reserves compared with the prior year offsetting fewer natural catastrophes.

Europe's third-biggest insurer by market capitalisation posted a net profit of $1.06 billion (€1.3 billion) for the first three months of the year, missing analysts' average forecast in a Reuters poll for $1.137 billion.

Zurich said it was on track to deliver its 2013 targets.

The company's combined ratio, which measures expenses to revenues, was at 94.9 per cent, compared with 94.6 per cent last year, as lower investment yields, lower net releases of reserves and higher commissions outweighed an absence of catastrophes and good weather conditions.

The reserve releases had an impact of $24 million on the bottom line, compared with $138 million in the prior-year quarter, financial chief Pierre Wauthier said in conference call for journalists.

"This quarter we had very little impact from reserve releases," Mr Wauthier said. "The result is truly due to the underwriting performance from the current year."

The company saw a decline of nearly $200 million in investment income in the first quarter to $1.573 billion, compared with the same quarter last year.

Reuters